Sold for $1.5bn only to buy it back for $300m

A quick note before we jump in…

25 people have signed up to get more information about the deals on my desk.

Investment amounts from $10,000 to $20M.

FYI, I have not forgotten you. Never!

There's just a lot going on as I'm working on a deal to acquire a larger stake in a company where I'm already a small shareholder.

Good news! You can invest in bonds with me on very good terms. Here’s more information:

What’s interesting is since June we have not spent a dime on marketing. It’s all organic.

Our portfolio default is less than 1 percent. It’s even hard to believe for ourselves.

When it comes to bonds, I want to make sure I give you all the details you need about our company, as well as the current economic and market situation here in Estonia.

Finishing the bonds presentation over the weekend.

As of now, here is our Profit and loss statement.

*Understanding the Credit loss/impairment line is very important to understand in the consumer lending buinses — we use our own internal debt collection. The default rate before that is already very low (1%), because we have a very small portfolio and we prefer to grow slowly.

We give credit to only very great customers as we do not need to take any necessary risk at this stage.

Importantly, at the end of our own debt collection system/flow, the default rate is 0.3%.

In case you want to invest in our bonds in the future, get on Modena Bonds list here and I will send you more information once our attorney has completed the documentation for this process.

- - - -

Playing the long-term game with long-term people.

Over the past year I have spent many hours each week doing researching and studying entrepreneurs.

People who have done great things and built great companies.

Companies that have made it really big.

The one I was studying this week, the financial numbers for the Q3: profit of $48.7 million

The gentleman founded the company in the 90s and still runs it together.

A true relationship based on trust and mutual respect.

"Avoid stupid mistakes, ego, greed and things like that," as they said.

Today however, I just heard a story about a man (let's call him Jimmy) who was a small shareholder in a very large company.

The company is maybe 12-13 years old and Jimmy is in his 30s.

In July-August something happened between the biggest shareholder and him — rumor has it Jimmy got greedy and cocky — the founder didn't like it so it was decided to buy Jimmy's shares and let Jimmy move on.

Today, Jimmy is at home, reportedly regretting his decisions and unable to think what to do next...

When in reality he should build his previous business to new heights.

But he messed up.

"Avoid stupid mistakes, ego, greed..." > Jimmy

My goal in life is not to be Jimmy, but more to be those older gentlemen who value real relationships based on trust and mutual respect, while avoiding stupid mistakes in life... and who made "$48.7M in profits in Q3".

Continuing my journey...

The goal is simple.

• Build in public

• Acquire great companies with attractive multiples

• Successfully own and improve businesses

• Provide great returns to our investors

• Repeat

Meanwhile, interview smart people on the HoldCo Builders podcast.

Life always has A PLAN for you because my current daily life is exactly what I wanted a few years ago.

- - - -

Imagine selling your company at the top and then buying it back at the very bottom.

A true underrated capital allocation move.

This is exactly what the following gentleman did.

• John Goff with Crescent

• Kirk Kerkorian

• Dan Gilbert & Quicken loans

John Goff sold his Crescent Real Estate to Morgan Stanley for $6.5 billion in 2007, just before the financial crisis.

With Barclays, Goff bought it back at a steep discount after the market collapse.

Kirk Kerkorian bought and sold MGM three times.

Just look how happy and relaxed he is. #goals, isn’t it?!

He sold MGM to Ted Turner for $1.5bn only to buy it back from him for $300m because Ted was experiencing financial issues. Kirk later re-sold MGM to an Italian magnate for $1.3bn. He mismanaged the company, and Kirk bought it back once again for $870m.

MGM went on to be worth north of $7bn and made up a large part of Kirk’s estate.

Kirk did this exact same thing in other industries as well, the key lesson being – your next deal might be in your rearview mirror.

And not only that...

He even created a commercial airline, sold it and then purchased it again before reselling it for good.

Dan Gilbert (next to Mr. Buffet) and Quicken loans…

In December 1999, a year and a half after the IPO, Intuit Inc. purchased Rock Financial Corp. for $532M. The company was renamed Quicken Loans.

In June 2002, two and a half years after selling the company, Dan Gilbert led a small group of private investors in purchasing the Quicken Loans subsidiary back from Intuit for $64M.

Again, a true underrated capital allocation move.

- - - -

Business is all about rapport, trust and luck.

On Monday this week we had a meeting in our office with one of our very small investors: we showed him our company, product and introduced our team members.

On Wednesday he called us…

“I talked to a friend of mine and he is interested in putting $350,000 into your bonds.”

That’s insane!!

Almost a month worth of work in one meeting.

That is something I didn't expect to be honest.

Update, as of Friday, we have $350,000 in our account.

Success loves speed.

- - - -

Some gentlemen only do big boy stuff.

Talked to a man who built a 30-story building right in the middle of downtown.

The next project, the sports complex with an Olympic-sized swimming pool.

"We all have the same 24 hours in a day, spend your time on bigger projects."

- - - -

Learning from these people, I do the following:

I only want to show/present you good deals.

Deals worth your time. I won't even share the rest. I want to respect your time.

But they will come, believe me.

Take care,

Mikk aka PrivatEquityGuy

P.S. In case you want to invest in our bonds in the future, get on Modena Bonds list here and I will send you more information once our attorney has completed the documentation for this process.

Lastly,

I have interviewed twelve people on HoldCo Builders podcast. People have said they loved the show. Which is pretty cool.

Here’s the recent one with Justin:

As always, thanks a lot for following the journey.